The conveyancing is complete and you’ve purchased your dream house.
Everything’s settled and you’ve been handed the keys. Heck, you’ve bribed your friends with pizza and beer or, more sensibly, hired professional movers, and now you’re all moved in. Time to celebrate.
But as you’re enjoying a beer or a glass of bubbly amongst the half-opened boxes in your living room you notice a giant hole in the ceiling. Then you try to re-heat a slice of pizza and the oven doesn’t work. To make matters worse, your dishwasher makes a funny noise and suddenly there’s water all over your kitchen floor.
Time to pick up the phone and tell the previous owner you want your money back, right? Wrong.
Sadly the phrase isn’t seller beware. It’s buyer beware. Caveat emptor. That’s right, some fusty old Latin phrase you dimly remember from school has come back to haunt you, and your house.
The common law principle known generally “buyer beware” means the onus is on the buyer to be satisfied with an item – in this case your dream house – before buying. If you find out something’s wrong after the fact it’s too late.
So as a buyer you must be aware of buyer beware.
Remember, you are in all likelihood prohibited from recovering damages from the seller for most property defects once settlement has occurred. While this principle has been altered in other jurisdictions, it remains a red light for property buyers in New South Wales.
Cover Your Bases
So how do you avoid a hole in the ceiling and the most disappointing house warming party of all time? You counter caveat emptor with common sense:
- The old adage “if its worth buying, its worth inspecting” couldn’t be more true. Don’t scrimp on having the property inspected by a professional (even if it is your fourth auction).
- Carry out a final, or pre-settlement, inspection of the property as close to settlement time as possible. Do this before you make the final payment and take possession of the home. Typically, you would do a final inspection the day before or on the day of settlement. If there’s a hole in the ceiling, you can deal with this problems before settlement. Unfortunately, the broken dishwasher may not have a remedy.
- During your final inspection check to make sure all the fixtures and fittings are still in place.
- Furthermore, you can avoid unpleasant surprises by careful inspection of the property, detailing any items you believe to be fixtures in the sales contract. Items such as light fittings, dishwashers, stoves, satellite dishes, sheds and security systems are just some of the fixtures you may include. Worse than a busted stove may be no stove at all.
By taking the time to document fitting and fixtures in your sale contract and by conducting a thorough pre-purchase and pre-settlement final inspection you can avoid any nasty surprises when you move in. As with many things, prevention is better than a cure and given that there are only a few exceptions to caveat emptor, best to enter into the transaction with eyes wide open.
After all, when the buyer’s aware the beer and pizza always taste better.